By Ray McGuire
Ocean freight rates are on the rise. This is particularly true of ocean container shipments. In the last three months average ocean freight rates (container transport particularly) have climbed up to 55%. Have you renegotiated your rates lately? If not now is the time!
There are quite a few charges that may be a part of the total ocean / delivery transport costs on a typical import shipment. Some may be negotiable with the carrier / forwarder (given sufficient volume and frequency) and if you understand how ocean freight rates are calculated.
Let's take a look at what some ocean freight cost components might be:
BAF - Bunker Adjustment Factor Surcharge
ACC - Alameda Corridor Surcharge
PNC - Panama Canal Charge
SUZ - Suez Transit Surcharge
PSS - Peak Season Surcharge
AMS - Advance Manifest Surcharge
CHS - Chassis Usage Surcharge
CAF - Currency Adjustment Factor
DDC - Destination Delivery Charge
THC - Terminal Handling Charge
ARB - Origin Arbitraries
AGS - Aden Gulf Surcharge
WRS - War Risk Surcharge
Depending on your terms of sale (Incoterms) you may pay origin charges including:
ORC - Origin Receiving Charge
ODF - Origin Documentation Fee
THC - Terminal Handling Charge
DTHC - Destination Terminal Handling Charges
If your shipment is moving inland in the US, you may pay:
DDC - Destination Delivery Charges
IPI - Inland Point Intermodal or MLB - MiniLandBridge
IFC - Inland Fuel Surcharge
In addition, your container freight rate may depend on the actual commodity being shipped.
Of course there are the myriad of other costs not directly associated with the ocean freight or container rate, some of which include:
Importer security Filing (ISF or 10+2)
Customs Brokerage
Duty & Taxes
Stripping and / or Transloading of Container
Interim warehousing
and, and, and ...
Effectively negotiating ocean freight is not so simple and depends on knowing more detail. Will you have many "one-time" shipments, or more a repetitive business with each shipper? How much product are you shipping at one time, or if repetitive, each shipment? If repetitive, how often? The answers to these questions also determine if you want to use a freight forwarder or negotiate directly with the ocean carriers.
Door to door transit time is also a huge consideration. Will you ship to a major or "gateway" port and then truck to multiple distribution centers? Or will it all go to one DC? If you are planning on moving the containers intact to an inland DC, some difficulty may arise depending on the ocean carrier, and rail charges can be quite high. A forwarder (or the customs broker) can often manage the container delivery trucking to and from the port much better than a carrier (if the carrier even would). Otherwise you must arrange the trucking.
Choice of your customs brokers would possibly depend on your choice of routing. The delay at customs will depend on the accuracy and completeness of your vendors' documents, as well as the efficiency of the selected broker.
Plan for success! Poor planning can result in much headache and unnecessary expense. Great success will follow your good planning.
Article Source: http://EzineArticles.com/?expert=Ray_McGuire
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